The Myth of the Omnichannel Retailer

The inescapable buzz word in retailing is “omnichannel,” a term that is meant to signify a seamless integration of brick and mortar stores with online and mobile commerce.

Retail executives have taken to uttering this term with abandon – on conference calls, in meetings and during investor presentations. It is the incantation old-line retailers hope will ward off the threat from online rivals, the argument for why their fleets of stores built out at great cost are actually competitive advantages in the age of e-commerce.

It turns out few retailers may actually be doing anything about it. A new study by SD Retail Consulting, which surveyed 35 large retailers, each with more than $1 billion in revenue, round a big gap between talk and action.

Among the findings: Only 29% of U.S. retailers allow online orders to be picked up in stores; only 18% have mobile commerce; and 80% say they aren’t sufficiently training store associates to serve customers who purchase from multiple channels such as in store or online.

“There has been so much written and spoken about this topic, one would have thought that retailers would have adapted quicker,” said Antony Karabus, SD Retail’s president.

One reason for the slow response is that many retailers are mired in antiquated IT systems and have been reluctant to commit to big new capital expenditures coming out of the recession.

At any rate, it looks like it will be a while before the ideal of bricks and clicks evolves into something more concrete.

Comments (5 of 15)

Byebye brick and morter. All your stuff is being mailed directly from China.Please inspect it for lead and toxins while in your home with duct tape around all the windows.. Happy Fathers Day. That mall down the street will become a kmart and video gambling parlor, thanks for the memories. Buyer Beware

8:37 am June 15, 2013

Gary Pudles wrote:

To go truly omni-chrannel will require a rethinking about the role of the brick and mortar store and a real data integration across multiple channels. One of the biggest issue is that not all touchpoints can reach all of the necessary data and for "corporate accounting" purposes many companies don't let people cross channels.

When the people in the call center and the people in the store are tied together by a real integrated data system and when consumers can touch the brand from multiple points and get the same experience, a true omni channel leader will emerge.

10:34 pm June 11, 2013

M9989 wrote:

I'm an employee of the source (a Bell Canada retail store), and I can proudly say we have pretty decent systems for selling on-line orders in stores and customers get free shipping when they pick the order up in stores.
I wish we could have the debit machine work for web orders, I'd be selling a LOT more if we did I can assure you of that. but at least we're hip to the internet age! lol.

2:21 pm June 11, 2013

Anonymous wrote:

Revelation 18:11 says,
"The merchants of the earth will weep and mourn over her because no one buys their cargoes anymore . . ."

Shareholder questioning of the CEO revealed several key issues: the internet shopper spent considerably more than the store shopper--three to four times as much, rich internet sales volumes were clustered around store locations indicating a symbiotic relationship leveraging store visits, internet sales were growing primarily domestically not internationally.

The CEO further indicated internet sales reduced markdown activity as items could be offered at prices independent of retail in store. The service component of internet was of paramount importance. Merchandise presentation must be full and content specific, for instance the cut of the shirt or dress must be made clear, and the customer has to see the merchandise from many angles, if not a 360 view.

Omnichannel requires the manipulation of information and the flexibility of inventory management and sales to be successful. Retail becomes much more process and service driven; think of retail more like the restaurant experience in which hundreds of variables must be managed to deliver hot product to the right customer, in the right location, at the right time.

This is a whole new skill set for retail to master. The devil is in the details. Many operators simply are not up to the challenge.